The CONSOLIDATED OMNIBUS RECONCILIATION ACT, ‘Continuation in medical insurance’, was introduced in 2017 to ensure that employees, who are members of an employer-sponsored group health insurance schemes, have a secure route to continued coverage in the event of termination.  You may apply for COBRA even if the termination is voluntary.

What is COBRA?

Cobra (also known as continuation coverage) offers security to employees in the event of termination (not applicable in the case of termination for gross misconduct) but there are constraints depending on your circumstances.

In the face of rapid economic changes, such as those inflicted by the COVID19 pandemic the act provides a measure of continuity when health is a critical concern.

It is not mandatory for you to request an extension of your insurance (under COBRA) but before making a decision you need to understand the 7 situations we discuss in this article and where to go for action  or further information


COBRA Fact 1

This is a federal law under which you are entitled to continue your employer-based health insurance policy on the same terms for up to eighteen 18 months from the date on which you lost coverage. The event could be that your employment was terminated (as above), your entitlement to group membership is by virtue of your spouse’s employment and you have subsequently become divorced.

COBRA is also called “continuation coverage”.

COBRA Fact 2

In many situations, you will get a notice from the benefits administrator or your group health plan advising you that your plan coverage is coming to an end and you can apply for COBRA as soon as you are notified except (as above) if coverage ceases as  the result of divorce

COBRA Fact 3

If you are entitled to COBRA i.e. you are a member of an Employer-sponsored health insurance plan, and your coverage ceases or is about to cease either because your employment is terminated or you resigned, your employer has to inform the administrator. Once your plan administrator comes to know about your new situation, you will be able to consider the options open to you in your 60-day Special    Enrollment Period.  If you have just turned or are shortly turning 65 and hence entitled to Medicare, and automatically enrolled.

COBRA Fact 4

The duration time for COBRA is generally 18 and 36 months.  During this time, you are entitled to extend the coverage you would have had if your employment had continued. You will be responsible for both your own and the employer’s share of the premium +2% administration fee.[COBRA is not a cheap option but, in some circumstances, represents the ‘best value’].

COBRA Fact 5

Talk to your State Health Insurance Program (SHIP) or your marketplace Health Exchange to review your options before you select COBRA coverage.

COBRA Fact 6

If you are a member of an employer-sponsored group plan as a family member either as a spouse or dependent (aged less than 26) you will cease to be eligible for insurance on the company plan if you are legally divorced from the qualifying employee coverage or you are under a parental plan and turn 26. Either event opens a Special Enrollment Period.  It is your responsibility to let the plan administrator know about the situation within 60 days of ‘the event’.

COBRA Fact 7

The majority of working-age Americans are members of employer-sponsored health insurance plans. This is rapidly changing.  As a consequence of the COVID-19 pandemic and the changing economic environment, millions of us are forced to re-examine our priorities.  If your health insurance coverage ceases you have, in most circumstances, the opportunity of an SEP.  Use this to explore the Market and find the plan that best your new circumstances.